ADB to provide $510m loan for development of renewable energy
By Asad Cheema

ISLAMABAD—The Asian Development Bank will provide $ 510 million multi-tranche loan to Pakistan for the development of renewable energy.
The agreement to this effect was signed between ADB and Pakistan here on Friday. The loan will finance a set of small to medium hydro power plants in the NWFP and Punjab.
The program is the first of its kind in Pakistan, and is one of the first to be developed under ADB’s evolving clean energy and efficiency initiative.
Pakistan’s energy supplies are highly dependent on oil imports, the cost of which accounts for a large share of the country’s total import bill. In addition, demand for power is outstripping supply. Electricity needs are projected to reach 162,590 megawatts (MW) by 2030, from 15,000 MW in 2005.
While thermal power (coal, oil, and gas) is expected to meet much of the future demand, there is enormous scope for more environment-friendly options. Renewable energy accounts for only 180 MW of Pakistan’s present power output.
The first project under the loan will finance a set of small to medium hydropower plants in Northwest Frontier Province and Punjab.
The governments of Northwest Frontier Province and Punjab expect to borrow up to $180 million and $150 million respectively to fund renewable energy projects. Other provinces can request funding for renewable energy projects totaling $170 million.
The Programme will expand country’s power supply especially in rural areas to serve about six hundred thousand new domestic connections for four point eight million people. It will also improve the liability and quality of supply.
ADB’s Country Director for Pakistan Peter Fedon said small to medium size hydro power plants offer the greates renewable energy potentials for Pakistan while possibilities also exist in promoting greater use of wind, solar and bio-mass power.
He said investments in such renewable energy options would not only be beneficial to Pakistan’s energy security but would boost social equity, lead to a cleaner environment and make economic progress.
The Alternative Energy Development Board is the executing agency for the Renewable Energy Development Sector Investment Program at the federal level. At the provincial level, the program will be executed via special purpose implementing agencies such as Irrigation and Power Departments.
Power and energy, together with transport connectivity and water, are major constraints in Pakistan to achieving the kind of high economic growth that can benefit the poor.
Under its clean energy and efficiency initiative, ADB is planning to expand energy efficiency operations in its developing member countries to $1 billion per year.
The Secretary Economic Affairs Division Akram Malik said the ADB’s support will go a long a way in helping Pakistan to meet the energy shortage.